Your editor has been trying to Roth her IRA with E-trade but faces a major problem. US law requires that the taxpayer doing the conversion pay capital gains tax on the non-Roth IRA account when converting it to a Roth. You have two years to pay. And this year, because of the market mess in 2009, you can convert to a Roth without income limits.
So my accountant was keen that I do the switch.
But that requires that E-trade evaluate the non-Roth IRA positions correctly. And they can't. Maddeningly, the price they are showing for one of my positions is not only more than what I paid; the stale price is from before my purchase. That means I would pay capital gains taxes on capital gains not made from my most recent trade.
The stock is an obscure ADR, as you would expect from me, MTDFF, Mutual Fund Public Co. Ltd or MFC of Thailand. This had been a pink sheet ADR, created by Citigroup when they bought a minority percentage in the Thai fund manager. It appealed to my taste from taking US investing vehicles to emerging markets.
Citi has had a few tumbles since then and the appeal of Thailand suffered because of political uncertainties after the overthrow of Thaksin Shinawatra, concern at the King's health, and the polarization of Thai politics.
I first bought it for my IRA in 2005 at 41 cents/sh before I moved to E-trade. My account was then with Morgan Stanley.
My e-trade purchase doubled by holding at 29 cents on April 17, 2009. My average cost was 35 cents. The stock is shown in my IRA as having had its last trade at 41-41.26 US cents on Dec. 28, 2007. That is 12 cents per share more than what I paid 16 months later.
E-trade claim they cannot find a marketmaker now, although they did the trade under a year ago. So I cannot sell the stock to establish its current value. My trade last April does not show up on their books now and they say they cannot any record of how the trade was done or what outside specialist or market-maker was used. They refuse to tell me who does their market-making at all.
In fact, one theory being floated by the E-trade New York Center managing my account is that the broker did the trade in the foreign market as a courtesy to me and then only charged me a discount US commission of the deal.
Frankly, I don't believe this mainly because I could not track or trade the stock after this supposed “courtesy.”
MFC continues to be listed and to trade in Bangkok's main exchange. I can check its price on the SET website. The most active marketmaker in Thai stocks is Pershing, a sub of BNY-Mellon, but where Internet discount brokerages are paid by marketmakers for order flow, the customer can't ask E-trade brokerage to place the trade there.
Having first cousins in Bangkok, I sent a query to the MFC website, offering them a chance to reply in Thai. Rajitporn of MFC Fund replied (in English, so I didn't need my cousins):
First of all, I have to appologise you for late reply. Refer to your request specified in your e-mail , an issue which you need to know is the MFC share price, now I can provide you the price of MFC share including histroy of the price for the past few months (as attached). The remaining information that you need I will supply you later as I have to find out from the registra and if you have further questions, please contact me via my e-mail firstname.lastname@example.org . Additionly, another channel that you can find company information is our website mfcfund.com. I hope the information in the attached file meet your requirement.
Company Secretary & Legal Service Department
So now I am expect to show the IRS that the price in my old IRA is wrong. All I have to do is check the Bangkok price in Thai bahts and convert at the daily rate into US dollars. And persuade the taxman.
Will the IRS let me do this if my broker gives contrary information? The customer man at E-trade says that my knowledge of the ADR market will persuade the Feds, but past experience with the IRS makes me dubious, and my accountant also.
Meanwhile, E-trade has sent me a corrected 1099 for my main account. It is stuffed with errors, not just showing payments for rights supposely sold which I never received, but also embarrassingly mixing up countries. My foreign tax payments to Ireland are said to have gone to Georgia, the country in the Caucusus. My foreign taxes paid to Australia are said to have gone to Austria.
Is Saakashvili a leprecaun?
Disclosure: long 14,000